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Strategic Services Management

Service Positioning

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Learning Outcomes For This Section

• On completion of this section, students will be able to:– Define the meaning of customer centricity– Reflect upon how this may apply to certain

organisations– Investigate the role and process of service

positioning

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Customer Centric Organisations

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Customer Centric Organisations

• What do we mean by customer centricity?

• ‘A business must set itself apart from its competition. To be successful it must identify and promote itself as the best provider of attributes that are important to target customers’

• Lovelock, C. and Wirtz, J. (2007)

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Customer Centric Organisations

• Last decade, business focus on

• Customer Relationship Management (CRM)

• Customer Satisfaction Measurement

• Customer Value Management (CVM)

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Reflective question

• Do CRM activities actually ‘manage’ the ‘relationship’?

• or is it a way to discover and exploit buying behaviour ….

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Moving towards a customer centric business process

• The approach• Traditional• Manufacturing industries – strategies focus on

production and logistics• Service industries – strategies focus on

delivering quality services• Customer centric approach• Recognises the above, but is this sufficient to

keep pace with change and survive in the competitive market place?

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Customer centric approach

• Premise– All processes impact upon the customer

• Aim– Know and understand customers (internal and

external)– Treat them as they expect to be treated– Anticipate needs and respond positively

• Requirement– Clear business strategies– Clear business values– Match in business culture

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Outcomes

• Consistent high quality experiences– Over all customer access points– Across all service, sales and marketing

programmes– Throughout the whole organisation

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Activity - Seven Habits of the Customer Centric Organisation

• Allow 20 minutes• Harvey Thompson suggested that a company

like Amazon.com is one of the best examples of a customer centred company. At the other end of the scale he puts Microsoft as an example of a product driven company. The following seven habits distinguish the truly customer centric company from the company that merely thinks a lot about its customers.

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Activity - Seven Habits of the Customer Centric Organisation

• Reflect upon the following statements and see how customer centric your organisation is

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Habit 1: We have a promise for our customers, not just a mission for ourselves

We have a mission statement for the company which looks like this:

Does not mention

customers

Mostly about the company

50/50 company / customer

Mostly about what we will

provide to our customers

A clear commitment

to our customers of what we will provide them

Score 0 Score 1 Score 2 Score 3 Score 4

Habit 2: We bundle services in with our services

We only provide

products

We provide minimal

service with our products

Our services are as good as

our average competitor

Our services are as good as the best of the

competition

We provide the full services

that any customer might

want

Score 0 Score 1 Score 2 Score 3 Score 4

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Habit 3: Our website is a welcome door, not a magnificent edifice

Our web site is like this:

An impressive view of all that the company represents

Our customers

can find what they want if

they are persistent

50/50 for general

visitors and for customers

Mostly for the customer

Our customers

can easily see how to get the

information they need

Score 0 Score 1 Score 2 Score 3 Score 4

Habit 4: The customer finds it easy to contact us, by whatever method is convenient

There are four usual ways of contacting any company – telephone, fax, email message or web site form. How many of these can the customer easily find from your web site?

We don’t have a web site

One way Two ways Three ways All four ways

Score 0 Score 1 Score 2 Score 3 Score 4

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Habit 5: Our telephone system is ‘customer friendly’ and not just cost efficient

Most calls are greeted by a gruff human

being

Most customers

wait until they talk to a machine

Most customers

talk to a machine but

can get a human being

We have a rapid

automatic call reception system

Most calls are greeted by a

friendly human being

Score 0 Score 1 Score 2 Score 3 Score 4

Habit 6: Our customers have one main contact who makes everything happen

No designated contact and

no information kept about customers

Several contacts but

little information kept about customers

Several contacts but with a good

logging system

Two main contacts with

a good logging system

There is one main contact

for each customer

Score 0 Score 1 Score 2 Score 3 Score 4

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Habit 7: Our customer service gives the service the customer really wants

A stress relief process for

complaints – no results

Sympathetic hearing –

minor results

Tries to correct the

problem

Corrects the problem and

minor compensation for the trouble

Really impresses

customer as they ‘make it

right’

Score 0 Score 1 Score 2 Score 3 Score 4

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How do You Score?

• Add up all your scores for the seven habits and see how you rate

Total score• 0 – 14 You probably turn off a large proportion of

potential customers• 15 – 20 You probably irritate some of your

potential customers• 21 – 25 You’re doing pretty well but the

competition may do better• 26 – 28 Now, you’re a company that I would

like to deal with!

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Service Positioning

• The positioning strategy• Must establish position for organisation or

product in minds of customers• Position should be distinctive, providing

one simple, consistent message (clues)• Position must set organisation or product

apart from competitors• An organisation cannot be all things to all

people—must focus

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Activity 2 – Product Positioning 1

• Allow 10 minutes• Consider your own organisation, and reflect upon the

following questions

1. What does your organisation currently stand for in the minds of current and prospective customers?

2. Which customers do you serve now, and which ones would you like to target in the future?

3. What is the value proposition and target segment for each of your current service offerings?

4. How do your service offerings differ from your competitor’s?5. What changes must you make to your offerings to strengthen

your competitive position? Avoid trap of focusing too heavily on points of differences that are easily copied

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Positioning Maps to Plot Competitive Strategy

• Represent consumer perceptions of alternative products in visual format

• Compare attributes

• Differences between customer and management perceptions highlighted

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Positioning of Hotels –Price vsService Level

Expensive

Shangri-LaHigh

ServiceModerate Service

Grand

Regency

Sheraton

Italia

CastleAlexander IV

Airport Plaza

PALACE

Atlantic

Less Expensive

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Positioning of Hotels -Location vsLuxury Level

High Luxury

Shopping District and Convention Center

Shangri-La

Moderate Luxury

FinancialDistrict

Inner Suburbs

Grand Regency

Sheraton

ItaliaCastleAlexander IV

Airport Plaza

PALACE

Atlantic

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Positioning After New Construction -Location vsLuxury Level

High Luxury

Shangri-La

Financial District

Inner Suburbs

Heritage

MandarinNew Grand

MarriottContinental

RegencySheraton

ItaliaAlexander IV

Airport Plaza

PALACE

Atlantic

Action?

Moderate Luxury

Castle

Shopping District and Convention Center

No action?

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Positioning after New Construction -Price vsService Level

Expensive

Shangri-LaHigh

ServiceModerate Service

HeritageMandarin

New GrandMarriott

Continental

Regency

Sheraton

Italia

Alexander IVAirport Plaza

PALACE

Atlantic

No action?

Action?

Less Expensive

Castle

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Activity 3 – Product Positioning 2

• 15 minutes

• Using your reflections in the activity ‘product positioning 1’, develop a position map of your organisation. This exercise can be repeated using as several attributes.

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Suggested Reading • Collier, D.A., Meyer, S.M. (2000) An Empirical Comparison of Service

Matrices. International Journal of Operations and Production Management. Vol 20 No 6 pp 705 – 729

• McDonald, M., Christopher, M., Knox, S. and Payne, A. (2001) Creating a Company for Customers: how to build and lead a market-driven organisation. Prentice Hall

• Imhoff, C., Loftis, L., Geiger, J.G. (2001) Building the Customer Centric Enterprise; data warehousing techniques for supporting customer relationship management. John Wiley

• Pine, B .J., Gilmore, J.H. (1999) The Experience Economy. Harvard Business School Press

• Silvestro, R. (1999) Positioning Services Along the Volume-Variey Diagonal. International Journal of Operations and Production Management. Vol 19 No 4 pp 399 – 420

• Thompson, H. (2000) The Customer Centric Enterprise; how IBM and other world class companies achieve extraordinary results by putting customers first. McGraw-Hill